"Education is not preparation for life; education is life itself."- John Dewey.
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Sunday, May 18, 2008

Overseas Graduates Paid More?

The following is a press statement from Jobstreet.com with regards to a study conducted which showed that graduates of overseas universities fair better than local grads in salary scale. I must say, the results didn't come as too much of a surprise, although I'd be keen to obtain the methodology and sample data for further analysis.

But before you read on, please bear in mind that these studies provide the "generalised" results i.e., there are always exceptions. You will find plenty of local graduates who are extremely competent and who may be making a lot of money in wages in contrast to some of the overseas graduates. However, as a whole, that may not be the case.

(Just to also point out that while was I an employer, more than 80% of my employees were hired as fresh graduates, of whom, the overwhelming majority of them were local graduates. While it was tough picking out quality graduates, they were certainly there if you look hard enough.)

Kian Ming has also written his views on the often heated subject of "local vs foreign graduates" here.

Here's the press release from Jobstreet:

In a 2008 study of more than 100,000 JobStreet.com members in Malaysia who hold a Bachelors degree and are currently working in the country, JobStreet.com has observed that graduates from overseas universities on average earn about 12 percent more than local graduates.

The salary gap is most apparent among those with up to five years of work experience.

Overseas graduates are earning a significant 20 percent more than their local counterparts. Even after 10 years or more of work experience, the gap is still more than 10 percent.

In terms of job specialization, the biggest salary gap between overseas and local graduates is in business-related fields such as management, economics, finance and marketing where overseas graduates earn about 15 percent more than local graduates.

In the engineering and IT/Computer fields, salaries are about 11 percent higher for overseas graduates.

In a similar study among 20,000 JobStreet.com members in Singapore, it was observed that there is no significant difference between the salaries of graduates from local Singaporean universities and overseas universities even after 5 or 10 years of work experience.

In conclusion, a Malaysian who graduates from a local Malaysian university earns on average a lower salary than those who graduate from an overseas university. There were no significant difference in salaries that exists among graduates in Singapore.

The final conclusion is equally unsurprising, but its a new angle to look at for it certainly demonstrates the disparity between our local versus Singapore's universities.

It is very easy to jump into the conclusion that Malaysian-based firms are a discriminatory bunch of evil capitalists - it is emotionally satisfying to be throwing such accusation.

But at the risk of sounding cliche, it is absolutely essential to differentiate the direction causality.

And to be more geeky, I casually hypothesise that it is not that employers discriminate against local grads, but rather on average, take on more competent employees regardless of origin of universities.

And if we assume that the quality of education leads to level of competence of employees, then this simply suggests that local education is inferior in training workforce for the private sector.

So what would be the implication of such hypothesis? If we remove the gap of educational quality between local and overseas universities, then we won't see firms appearing to be 'discriminating' against local grads.

And ta-da, we have the empirical evidence from Singapore! Employers there do not appear to discriminate against local grads becuase the education system is not inferior.

In my opinion, local Universities students (probably from IPTA) tends to work with the govt, whereas foreign Uni students (IPTS) tends to work with the private sectors. Everyone knows private pays better but more preasure.

There's something to be said about pseudo-foreign grads, which are of the 3+0/2+1 but mostly go to local campuses and receive a foreign degree, though everything else but the name and the curriculum might as well be local.

I don't know what to do with these and I guess they are stuck somewhere in between. Clearly they can't be better than top-tier foreign (Harvard, Oxford), and if they are a bit dodgy they may even be worse.

If you believe that the quality of local education is less good compared to foreign education and that employers pay for what they get then the result that foreign grads are paid more should not be surprising. And, if you take university rankings as a proxy for quality of education then it is easy to draw the conclusion that local education here is less good.

It is also patronising and slightly tragic (comical?) to see politicians, academia and university administrators argue forcefully that they are "world-class". Respectfully, Cambridge is world-class - the UM may, and only in South East Asia, just only be very good.

Because you can't make foreign education worse (export tempurungs? bwahaha) local education has to get better, and the pace at which it gets better has to be faster than the ongoing betterment at foreign universities.

This is not an easy thing to do. As an "industry", the free market attempts aka what you see in the private sector here come up with mixed results. On the one hand are some nice sixth-form colleges (Taylors, HELP, Sunway, KTJ(?)) that have built up a decent brand name and have even attracted a fair amount of overseas students from China and elsewhere that makes you think, hey, it's not so bad.

On the other hand there are the randoms that pride themselves on twinning programs with the 107th (of 119th!) best university in Great Britain and elsewhere, where the top two degree programs offered are business studies and marketing - an utter a waste of time as an academic subject, but apparently something of value to those who take them and to employers (why else would they be so heavily offered or subscribed?). This is odd, because that would lead to the conclusion that maybe private education here is 'all good' after all, but they still just somehow seem a bit fishy to me.

So you have mixed results from the private sector. The guys here have covered enough of the public sector already and you only need to look across the Causeway to see what a 'thumbs up' education policy is like... and whilst the logical conclusion would then be to have a 'thumbs down' on Malaysia it should be remembered that the policy aims (even if the aiming was a bit off) were very different.

As it stands I don't think you can leave it to the private sector to sort this out - what's in place now seems to be a quick fix and it works but there's too much at stake to just assume it will continue to work out for the future?

The thrust has to come from an imaginative and yet aggressively progressive education policy, where the shift in the policy aim from ethnic representation to education to create relative socio/ economic/ academic advantages is clear.

Is this what the National Blueprint for Education is? I certainly hope so.

From their websites, University of Strathclyde is the highest ranked and most impressive but I kind of like Paris Graduate School of Management due to the schedule. Would appreciate your kind feedback.

My wife is also interested in doing her DBA at Southern Cross University. What is the latest news about this University? Your kind input is much appreciated.

"On the one hand are some nice sixth-form colleges (Taylors, HELP, Sunway, KTJ(?)) that have built up a decent brand name and have even attracted a fair amount of overseas students from China and elsewhere that makes you think, hey, it's not so bad."

Respectfully, I urge deeper look into this. Attracting foreign students is good, but not until we look deeper.

How good are these students? The quality matters. Of course we cannot expect our private Unis to fight with NUS when our UM already lose backside. But, what is the quality of foreign students we attract?

I do a simple compare. But simple email enquiry, I found out NUS takes in 95% or higher marks for Indian Central Board, and Tsinghua, Peking University level type students for China. Where are we compared to that? If we are not far off, then yes, it is good. If we are a distance away, then how far, and how are we bridging it?

This study is too general to make a helpful finding. One reason contributing to the disparity is that most foreign grads were in marketable/professional courses, whereas locally you have a myriad of arts and religious courses that hardly add value to employers.

On the Singapore one, it is actually quite surprising because local graduates from SMU, NTU and NUS tend to do a lot better than the average foreign graduate (i.e. from a twinning program or a less selective Australian or UK university).

I suspect Jobstreet's survey, for Singapore at least, is not particularly representative. I doubt many of the graduates of selective, local universities use Jobstreet as they have really good and active career guidance offices.

Employers should look into their candidates on a overall basis, and not just because he or she is an overseas graduate. An example could be a 1st Class Honors local university graduate may not be as competent as say a 2nd Class Honors Overseas graduate because the latter may possess better communication skills etc. This applied vice-versa. However, I must admit that many local graduates tend to lack their non-academic competencies which I believe the universities need to place more emphasis on.

Well, most employers just dont really care about this. Either due to ignorance or wanting to exploit the situation.

There is an article about the Top 30 Job Vacancies Websites in Malaysia - Malaysia Job

There are a variety of job vacancies in Malaysia, just as there are many job websites catering to a variety of industry needs. Some job sites provide job vacancies for specialised jobs, while some job sites are more specific to a particular industry or job category.